The repercussions of Europe’s negative interest rates policies are starting to come fast and furious as now Ireland has joined Germany and Austria in having a bank start to charge their own depositors for holding money in the financial institution.
On Aug. 19 it was reported that the Bank of Ireland will soon be charging business account holders a .01% (fee) on those who hold more than €10 million in deposits.
Deposits at Bank of Ireland are soon to face charges in the form of negative interest rates after it emerged on Friday that the bank is set to become the first Irish bank to charge customers for placing their cash on deposit with the bank.
This radical move was expected as the European Central Bank began charging large corporates and financial institutions 0.4% in March for depositing cash with them overnight.
Bank of Ireland is set to charge large companies for their deposits from October. The bank said it is to charge companies for company deposits worth over €10 million.
The bank was not clear regarding what the new negative interest rate will be but it is believed that a negative interest rate of 0.1 per cent will initially be charged to such deposits by Ireland’s biggest bank. - Goldcore via Zerohedge
Ironically, it is these desperate moves by the European banks that are causing individuals and businesses to rush out of fiat currencies and into physical gold to store their money and wealth. Already in 2016, and in particular since the ECB and Bank of Japan both directed monetary rates into negative territory, the biggest winners have been alternative denominations like gold and bitcoin.
The intended purpose of negative interest rates is to get people and companies to spend their wealth, rather than save it, and to rely more upon credit creation for growth versus the use of real capital to build equity. But so far the results have been the opposite of what central banks have wanted, and instead of spending their money in the economy, or on assets such as stocks and real estate, many are moving completely out of the system, and into hard assets that keep their wealth out of the control of these central bankers.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.